India had been one of the fastest growing economies till early 2011. For almost half a decade before that, along with China, India was clocking over 8 per cent GDP growth annually and talks among analysts were ripe that India, along with its neighbour, would spearhead Asia’s rise in the new world order of the 21st century. However, things have gone awfully wrong for us ever since! The growth rate has kept plummeting, ebbing now at less than 5 per cent in the previous financial year; even till date, there is little light at the end of the tunnel. Two of the foremost reasons for such bottoming out are dried up investments and a rising current account deficit, which are becoming worse with each passing year as the burden of the global slowdown becomes heavier. While our current account deficit has reached a record 4.8% of GDP in FY 2012-13, as per a recent chamber of commerce report, new investment proposals from domestic and foreign entrepreneurs have dried up by 75% as compared to the ...
Dr. Arindam Chaudhuri
(An IIPM Think Tank Blog)